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Transport infrastructure challenges impact shippers and economy

PORT congestion the Philippines is not only frustrating shippers but leaving scars on the country's expanding economy, says the UK's Transport Intelligence.

Trucking costs have jumped in some cases by 300 per cent while port stakeholders are incurring additional costs for terminal handling, container imbalance and other fees, says Ti.

Industries are facing rising costs. For example, the steel industry has witnessed operational costs rising an estimated 50 per cent because of delivery delays of materials needed for production.

Meanwhile shippers appear to be getting frustrated and are looking for alternatives.

"There is one company, which has shifted 50 per cent of its volume outside the Philippines because of delivery delays caused by port congestion," said Semiconductor and Electronics Industries president Dan Lachica, reports the Wall Street Journal.

According to Drewry Maritime Research, port congestion is on the rise around the world, but in many cases it is the result of short-term problems.

These include strikes, bad weather, IT breakdowns, basic terminal repairs and upgrade, and could very well escalate and strain supporting infrastructure to its limits.

The situation in the Philippines highlights this strain and is resulting in a domino effect as costs rise for transport, logistics providers, shippers and ultimately, consumers.

Asia Pacific is undergoing numerous infrastructure projects as supply chains adapt to changing requirements.

The region is undergoing shifts in manufacturing to "frontier countries" such as Myanmar and Bangladesh and this is resulting in an intricate, intra-regional supply chain as Asian countries work to connect infrastructure networks.

Meanwhile modal shifts favouring road and rail linking Asia and its neighbours to the west are creating new infrastructure challenges. All this while maintaining and expanding infrastructure to support export trade with neighbours to the east.